India Inc wants US to lift protectionist steps

Last Updated 27 October 2010, 15:57 IST

Noting that in the last 2 years, there has been an “undeniable rise” in the protectionist tide arising from the US, Confederation of Indian Industry (CII) Deputy Director Kiran Pasricha said protectionism has not been restricted to rhetoric alone.

“Whether it was the ‘Buy America’ provisions in the Recovery Act of 2009 that restricted the import of iron and steel or the Border Security Bill that doubled visa fees for...or Ohio State government’s recent ban on off-shoring IT projects, (Indian) industry is watching and going through the adverse impact of such policies,” she said.

Pasricha said CII hopes that Obama will recognise India as a true economic and strategic partner and acknowledge the contribution that Indian companies are making in the US.

Meanwhile, a CII report, in run up to Obama visit, has also expressed concerns over growing signs of protectionism in the US economy as it is seen as closing in, in order to safeguard its economic well-being and prevent job losses. It has said that from 2009 to 2010, various bills and clauses have been passed by the US Administration, which have irked global industry members and posed a threat of retaliatory trade wars.

Discriminated against

Topping the list is the American Recovery and Reinvestment Act of February 2009, which requires that all the iron and steel for infrastructure projects be produced in US. CII has also said that India has attracted the second highest number of anti-dumping cases from the US after China and US has levied 20 anti-dumping cases on Indian goods during 2000-2009.

These cases have been found mainly in sectors like chemicals, iron and steel and processed and marine food. Indian shrimp exports have been facing tough times ever since anti-dumping duties were imposed, five years ago.  CII also expressed concern over the fallout of the US Foreign Manufacturers Liability and Accountability Act on the Indian industry — exporters as well as small manufacturers.

It was introduced in August 2010 and seeks to protect US consumers by requiring foreign manufacturers and producers to take direct responsibility on any liability arising out of their products. CII’s preliminary estimates suggest that the additional cost of compliance with this new American law for Indian companies could be anywhere between US$300-500 million.

As per the Act, Indian exporters would be potentially liable for faulty products in which Indian made parts, components or intermediates are used. “This would significantly impact the competitiveness of Indian exports,” the report said.

(Published 27 October 2010, 15:57 IST)

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